No you cannot sue the U.S. Post Office. There's something very wrong with a lawyer, especially one in small town, charging $790 to re-send a letter; you should dispute this exorbitant amount.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
I suspect that if you examined a copy of the letter that the attorney sent, you would find that the address as he first used it, was somehow in error. In other words, be sure you are mad at the right person. And yes, that charge to remail a letter is outrageous. Demand a copy of the first letter (and envelope if it came back to him) that he sent and check out the address carefully.